The economy added 313,000 jobs in February, according to the latest jobs report, a good sign for businesses, investors and people seeking work.
The Bureau of Labor Statistics report comes one day after President Donald Trump announced plans to impose sweeping tariffs on steel and aluminum imports. The move injected a measure of uncertainty into the economy as critics warned of a possible trade war.
But the jobs figures pointed to strong economic growth across several sectors, and economists and analysts said they expect the solid jobs growth to continue through 2018. Here are our top takeaways from the February report:
- Biggest monthly gain since 2016: The 313,000 jobs added in February were the largest monthly gain since July of 2016, when the economy added 325,000 jobs. The figure for February was also significantly higher than the roughly 200,000 new jobs that most economists had expected.
- Unemployment rate unchanged: The unemployment rate was 4.1 percent, a number that has held steady for five straight months. It’s the lowest unemployment rate in 17 years. (The labor force participation rate in February was 63 percent, a 0.3 percent jump from the previous month). The low unemployment rate and strong demand for new workers should benefit people seeking jobs, said Mark Hamrick, Bankrate.com’s senior economic analyst. “Workers probably do have a bit more ability to pick and choose with job openings,” Hamrick said.
- Wage growth slowed, slightly: Average hourly wages rose 0.1 percent last month, down from the 0.3 percent gain seen in January. The flatlined wage growth and strong jobs numbers were welcome news for investors. “This report has a Goldilocks feeling about it: incredibly strong growth but no real wage pressure,” said Luke Bartholomew, an investment strategist at Aberdeen Standard Investments.
- Interest rate hikes coming: Another strong jobs report means the Federal Reserve will likely raise the benchmark interest rate at its meeting later this month. But the decline in wage growth dampened concerns about inflation, along with “the concern that we’re about to enter a rapid hiking cycle,” Bartholomew said.
- Construction and manufacturing continue to grow: Both sectors had strong months, continuing a trend that Trump has touted as proof that his economic policies are paying off. The manufacturing industry added 31,000 jobs. Construction added 61,000 new jobs, a “surprisingly strong” number in the middle of winter, when construction tends to slow down, said Cathy Barrera, the chief economist at ZipRecruiter. “I was happy to see that we are continuing to see growth in manufacturing jobs; we saw significant growth in the second half of 2017,” Barrera wrote in an email.
- A big question: How could Trump’s tariffs impact the economy? The new tariffs on imported steel and aluminum are slated to take effect later this month, but other countries will have a chance to negotiate for exemptions with the United States, making it unclear exactly who will be affected, and to what extent. “The fear is that this could absolutely create a significant problem for the U.S. and the global economy. But we don’t know how this is going to work out,” Hamrick said. Bartholomew said the tariffs likely won’t be as disruptive as critics have warned. “It’s important not to be melodramatic,” he said, adding, “it’s bad news but we should be careful not to overstate the impact.”